As matters have turned out, the invoice was paid and the advertisements from Creative Ads Pty...
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As matters have turned out, the invoice was paid and the advertisements from Creative Ads Pty Ltd immediately proved very effective in gaining "Online and Face to Face Accounting" many new clients. The business has quickly grown exponentially with its revenue reaching $40 million. The business has had to employ many more employees and the workforce has increased to 50 employees. The decision has been made to purchase new office space in an office tower on Grenfell Street in the city of Adelaide. This will bring the total value of business assets to $10 million. Tom and Michael and the other joint owners are considering whether it is time to change the business structure. The following objectives have been discussed and agreed by all: 1. They want to eliminate or reduce their personal liability. 2. They want to be able to protect assets, both personal assets and business assets. 3. As the business profits grow, they want the profits to be retained for business development and further expansion. 4. They want to minimise income tax. 1) Which other business structures would be relevant in this context, and what would be the advantages and disadvantages of the relevant business structures in the circumstances mentioned? Which business structure would you recommend to achieve the objectives stated? (10 marks) The "Online and Face to Face Accounting" business is now incorporated. Tom has recently come into the new office and as he exits the lift he is struck by a trolley full of new computer equipment which then all falls on him. He is badly injured and unfortunately dies a few days later. Tom's spouse has made a claim for compensation under the company's insurance policy that covers death of an employee, but the insurer refuses to pay. The insurer argues that Tom was a joint owner of the "Online and Face to Face Accounting" business and not just an employee. 2) Is the insurer justified in refusing to pay Tom's spouse a compensation payment on the ground argued by the insurer? Use the Corporations Act and any relevant case law to support your argument and conclusion. (5 marks) As matters have turned out, the invoice was paid and the advertisements from Creative Ads Pty Ltd immediately proved very effective in gaining "Online and Face to Face Accounting" many new clients. The business has quickly grown exponentially with its revenue reaching $40 million. The business has had to employ many more employees and the workforce has increased to 50 employees. The decision has been made to purchase new office space in an office tower on Grenfell Street in the city of Adelaide. This will bring the total value of business assets to $10 million. Tom and Michael and the other joint owners are considering whether it is time to change the business structure. The following objectives have been discussed and agreed by all: 1. They want to eliminate or reduce their personal liability. 2. They want to be able to protect assets, both personal assets and business assets. 3. As the business profits grow, they want the profits to be retained for business development and further expansion. 4. They want to minimise income tax. 1) Which other business structures would be relevant in this context, and what would be the advantages and disadvantages of the relevant business structures in the circumstances mentioned? Which business structure would you recommend to achieve the objectives stated? (10 marks) The "Online and Face to Face Accounting" business is now incorporated. Tom has recently come into the new office and as he exits the lift he is struck by a trolley full of new computer equipment which then all falls on him. He is badly injured and unfortunately dies a few days later. Tom's spouse has made a claim for compensation under the company's insurance policy that covers death of an employee, but the insurer refuses to pay. The insurer argues that Tom was a joint owner of the "Online and Face to Face Accounting" business and not just an employee. 2) Is the insurer justified in refusing to pay Tom's spouse a compensation payment on the ground argued by the insurer? Use the Corporations Act and any relevant case law to support your argument and conclusion. (5 marks)
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The corporation provides an entity with a separate legal identity from its owners It is a ... View the full answer
Related Book For
Accounting Business Reporting for Decision Making
ISBN: 9780730302414
4th edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver
Posted Date:
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